Refer to Figure 6.1 for the following questions.
Figure 6.1

-The movement from A to B to C in Figure 6.1 illustrates:
A)an improvement in technology.
B)a decline in capital per worker.
C)diminishing returns to capital.
D)diminishing returns to labour.

Question

Refer to Figure 6.1 for the following questions.
Figure 6.1
 
-The movement from A to B to C in Figure 6.1 illustrates:
A)an improvement in technology. 
B)a decline in capital per worker. 
C)diminishing returns to capital. 
D)diminishing returns to labour.

Quizplus · Accepted Answer

The movement from A to B to C in Figure 6.1 illustrates diminishing returns to capital. As the economy increases its capital per worker from point A to B, output increases at an increasing rate, but from point B to C, output increases at a decreasing rate, indicating that further increases in capital per worker are resulting in diminishing returns.

Refer to Figure 6.1 for the Following Questions